Mindmap Automotive Logistics

The automotive supply chain is a large, complex operation that requires sophisticated management techniques, substantial information technology expertise, and close coordination. Logistics service provider DSV and supply chain movement have created a mind map for managing the automotive supply chain, including a handy description of the route and with road signs indicating potential hazards along the way.

Trends

The current state of the automotive market is characterized by increasingly stringent design regulations to reduce carbon emissions and consumer expectations in terms of (semi) autonomous driving which make the last 5 decades seem like smooth sailing. Automotive manufacturers will have to take on a leading role in the Internet of Things if they want to capitalize on the huge advantages this increased connectivity will bring to car owners. Traditional off-shore strategies are being challenged by political developments like Brexit, the Russian boycott, TTIP/TPP and the situation in North Africa.

Impact

Automotive manufacturers will need to increase R&D to keep pace with competition especially in the area of electronic vehicles and autonomous functionalities. Modular and more frequent releases of new car series that can be continuously updated and remotely upgraded. Traditional dealer relations will be challenged to represent the decreasing value these networks add in the purchase and maintenance process. In general, the split between mechanical and digital/electronical capabilities of automotive manufacturers will sharply pivot towards the latter.

Challenges

As the defining features for new car models will be more and more determined by innovations in software instead of mechanical features, and the rate of technology change is infinitively faster than mechanical, new approaches to Life Cycle Management will be needed. Just in time / Just in sequence capabilities will need to be further developed and optimized to accommodate this. After market logistics can expect increased complexity as a result of Direct to Consumer channels used by new manufacturers.

Solutions

Traditional automotive manufacturers can look forward to a wide variety of alliances, ventures with and acquisition of technology providers. Increased backward integration in the supply chain with e.g. logistics service providers will be a prerequisite to achieve the rotation and levels of inventory needed profitably make fast changing series and models. 3D printing slow moving spare parts will reduce some of the After Market costs. Mass adoption of tagging technology will finally make full supply chain visibility a reality.